High-performance rubber: key material for Green Tires Dr. Joachim Grub Head of Performance Butadiene Rubbers business unit São Paulo, March 4, 2013
LANXESS PBR top solutions meeting future mobility needs PBR overview Key figures: Sales: > 500 m Capacity: >900kt/a Employees: >1,000 Customers: >250 Product groups: Polybutadiene rubber (PBR) Styrene-butadiene rubber (S-SBR and E-SBR) Plastics 11% Sales by end use [BU sales] Lifestyle & leisure Technical 7% rubber 10% Tire & retread 72% Market Global nameplate capacity: ~10,600kt 1 Global demand growth (CAGR 2012-2017) 2 for S-SBR and Nd-PBR ~10% LANXESS is the leading supplier of high-performance rubbers 1 IHS Chemicals 2012; 2 LANXESS estimates based on IHS Chemicals 2012 2
High-end rubber needed to improve overall tire performance Rolling resistance accounts for 20%-30% of fuel consumption LANXESS solutions to reduce rolling resistance Selected tire * classifications by grip and rolling resistance Rolling resistance coefficient Durability coefficient Grip RR** E E 1 2 3 4 5 6 B E B B A B E E E E Rolling resistance still underperformed Standard rubber LXS HP rubber Standard rubber LXS HP rubber Effect of LANXESS high-end rubbers in treads General Purpose Rubber Wet Grip Rolling Resistance Reduction Nd-PBR Nd-PBR & S-SBR Durability Source: GTÜ and ACE; * Six of the leading global tire producers; ** Rolling resistance 3
Nd-PBR and S-SBR enabling high-performance Green Tires Products Nd-PBR S-SBR Characteristics Outstanding abrasion resistance Reduced rolling resistance Excellent strength High crack resistance Excellent wet grip Reduced rolling resistance Good abrasion characteristics Superb mechanical properties Tire industry applications Tread Undertread Sidewall Carcass Beadregion Tread PBR production technologies lead to: Nd-PBR with high molecular weights and low polydispersities Rubber with superior performance / processing balance, e.g. via patented Mooney Jump Reactions Tailor-made S-SBR via fine tuning of macro- and microstructures and functionalization 4
LANXESS AA-rated concept tire European tire labeling A A S XES tire N A t L ncep o c AA 5
LANXESS PBR global footprint with worldclass manufacturing base Port Jérôme, FR Dormagen, GE Serving current and future requirements of performance-oriented customers Orange, US Cabo de Santo Agostinho, BR Triunfo, BR Duque de Caxias, BR Singapore Emerging markets shift towards performance applications LANXESS has strong footing in BRICs Strategic investments underpin excellent position BU PBR: production site BU PBR: technical & marketing center Growing with our customers 6
Converting production in Triunfo from E-SBR to S-SBR Production of the latest grades of S-SBR as of the end of 2014 Investment of EUR 80 million financed from the company s cash-flow Up to 500 temporary workers needed during conversion phase A regular supply of E-SBR will be maintained from the company s plant in Duque de Caxias in Brazil with a capacity sufficient to fulfill the entire demand of the Brazilian market New capacities to meet the strong demand for Green Tires 7
Promising future for automotive and tire industry in Brazil 4 th largest market & 6 th largest producer in the world 6% annual car production growth expected until 2020 5.2% of total GDP & 22% of industry 63 million vehicles produced until 2011 (54 years of activity) 26 automakers, 500 autoparts manufacturers, 53 plants, 4,554 dealers US$ 50.5 billion invested (1994-2011) and US$ 60 billion investment estimated between 2013-2017 66.9 million tires produced in 2011 Tires market boosted by growth in vehicle production Sources: ANFAVEA; ANIP; ABLA; Valor Econômico 8
Strategy driven by the Tire Labeling Program and the Inovar-Auto Tire Labeling planned to be implemented in October 2016 Inovar-Auto goal: minimum improvement of 12% in energy efficiency of the fleet by 2017 Inovar-Auto new automotive regime between 2013-2017 Aim: more energy efficient vehicles LANXESS sales of highperformance rubber for green tires boosted by Tire Labeling and Inovar-Auto Green tires alone reduce fuel consumption up to 7% 9
The leading supplier of high-performance rubbers for Green Tires 1 LANXESS S-SBR and Nd-PBR enable high-performance tires 2 Satisfying the increasing demand for high-performance rubbers 3 Future-oriented investments with proximity to key markets 10